The UK has now updated its guidance on oil shipments etc., the catchily named “UK Maritime Services Prohibition and Oil Price Cap Guidance – Guidance for the UK ban on the provision of maritime transportation of, and associated services for the maritime transportation of, certain Russian oil and oil products.” Whilst the aim is to prohibit the movement of oil and oil products it could be of wider effect – especially for any company who still has equipment or other assets remaining in Russia.
What’s this about?
The UK, in line with other countries in the Western world, has progressively increased sanctions against Russia. The measures relate to trading in oil or oil products from Russia and impose sanctions on those who are involved in trades which do not meet the provisions on capped pricing. In addition bans are imposed on those providing maritime transport for the oil as well as any associated services.
How wide are the prohibitions?
There must be concerns here on how wide the term “associated services” will be applied in practice. The regime does not just apply to oil shippers. It can also cover the supply and delivery of oil or oil products or the provision of financial services, funds, or brokering services relating to the supply/delivery of oil and oil products covered by the UK ban. This could include insurers and reinsurers.
When do the measures come into force?
The measures apply to Russian oil with effect from 5 December 2022, and for Russian refined oil products from 5 February 2023.
What are the practical effects?
The core of the provision is oil and oil pricing. However, in cases where businesses are involved in providing services that could be used for Russian oil or gas the resulting compliance review will become even more difficult.
In addition to wind down provisions there are exclusions and also possibilities for licences.
Organisations who could be affected should consider:
- Reviewing their operations to see if they could be affected. If there is a possible issue it may need to be reported within 30 days of the transaction or proposal;
- Reviewing their procedures to address risk assessment and increase their due diligence when looking at potential transactions;
- Updating and/or revising policy documentation;
- Reviewing existing contracts and doing due diligence on existing customers;
- Reviewing retention periods for documentation – in some cases details of potentially relevant transactions must be retained for 4 years after the end of the calendar year for that transaction; and
- Undertaking training for front-line and back office staff on the new rules.
There is more information on the sanctions regime in the UK post-Brexit here https://www.corderycompliance.com/post-brexit-sanctions-aml-export-control/
There is more information on EU & UK sanctions related to Russia here https://www.corderycompliance.com/category/sanctions/
The guidance together with the relevant forms is available here https://bit.ly/3ZM8yNW
For more information please contact John Grayston or André Bywater who are lawyers with Cordery in London where their focus is on compliance issues.
|John Grayston, Cordery, Lexis House, 30 Farringdon Street, London, EC4A 4HH||André Bywater, Cordery, Lexis House, 30 Farringdon Street, London, EC4A 4HH|
|Office: +32 (0)2 737 1361||Office: +44 (0)207 075 1785|